1-1     By:  Cain                                              S.B. No. 911

 1-2           (In the Senate - Filed March 4, 1997; March 6, 1997, read

 1-3     first time and referred to Committee on Jurisprudence;

 1-4     March 26, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 6, Nays 0; March 26, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 911                     By:  Cain

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the protection or release of a trustee from liability

1-11     under certain circumstances.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Section 114.001, Property Code, is amended by

1-14     adding Subsection (e) to read as follows:

1-15           (e)  The trustee has the same protection from liability

1-16     provided for a fiduciary under 42 U.S.C. Section 9607(n).

1-17           SECTION 2.  Section 114.005, Property Code, is amended to

1-18     read as follows:

1-19           Sec. 114.005.  RELEASE OF LIABILITY BY BENEFICIARY.  (a)  A

1-20     beneficiary who has full legal capacity and is acting on full

1-21     information may relieve a trustee from any duty, responsibility,

1-22     restriction, or liability as to the beneficiary that would

1-23     otherwise be imposed on the trustee by this subtitle, including

1-24     liability for past violations, except as to the duties,

1-25     restrictions, and liabilities imposed on corporate trustees by

1-26     Section 113.052 or 113.053 [of this subtitle].

1-27           (b)  A beneficiary who has full legal capacity and is acting

1-28     on full information may release a trustee from liability for an

1-29     investment made or recommended by an agent retained by the trustee

1-30     for that purpose, including an agent who is an affiliate of the

1-31     trustee and whose employment is determined by the beneficiary to be

1-32     beneficial to the trust.  The release is also a release as to a

1-33     minor or unborn or unascertained person who is not otherwise

1-34     represented to the extent that the person's interest is adequately

1-35     represented by another party with a substantially identical

1-36     interest in the trust estate.

1-37           (c)  A [The] release under this section must be in writing

1-38     and delivered to the trustee.

1-39           (d)  A beneficiary is not precluded from bringing an action

1-40     for breach of contract against an agent whose conduct is the basis

1-41     of a release under Subsection (b).  In that action, the conduct of

1-42     the agent shall be judged on the basis of the standard for trust

1-43     management and investment prescribed by Section 113.056(a).

1-44           (e)  In this section, "affiliate" has the meaning assigned by

1-45     Section 111.004.

1-46           SECTION 3.  This Act takes effect September 1, 1997.

1-47           SECTION 4.  The importance of this legislation and the

1-48     crowded condition of the calendars in both houses create an

1-49     emergency and an imperative public necessity that the

1-50     constitutional rule requiring bills to be read on three several

1-51     days in each house be suspended, and this rule is hereby suspended.

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